10 March 2011
California Edition
Calendar
March 16-18
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March 24-25
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E-Mail
info@payersandproviders.com with
the details of your event, or call
(877) 248-2360, ext. 3. It will be
published in the Calendar section,
space permitting.
District Pay Well Below State Average
Many CEOs Earn Fraction of Non-Profit Counterparts
California’s district hospital chief executive Payers & Providers last year. Those gures
ofcers often earn signicantly less than their were primarily for 2007 and 2008.
counterparts in the non-prot private sector, The compensation gures provided by
according to compensation data released last Chiang’s ofce are skewed in that base
week by the state controller’s ofce. income included not only salary but bonuses,
Of the 51 car stipends and
hospital other forms of
districts that A Snapshot of Hospital District CEO Pay, 2009 cash payment
submitted Highest Reported Total Compensation: $905,084 (Nancy Farber, considered
reports to the Washington Township Hospital District) taxable income,
ofce of according to
California
Lowest Reported Total Compensation: $146,930 (Jonathan
Brenn, Corcoran Healthcare Distrct)
state ofcials.
Controller Taxable
Highest Compensation Per Bed: $12,122 (John Halfen, Northern
John Chiang, compensation
Inyo County Hospital District/total compensation $303,041/25
38 have CEOs on 990 tax
beds)
or executive returns led by
directors who Lowest Compensation Per Bed: $1,269 (Edward Mirzabegian, private sector
Antelope Valley Healthcare District/total compensation
receive some hospitals is
$533,177/420 beds)
form of broken into
compensation, Source: California Controller separate
and 27 categories. As a
oversaw the result,
daily management of a hospital within their additional compensation among the district
district in the 2009 reporting year. The average CEOs is a fraction of that reported by their
district CEO earned base cash compensation private sector counterparts – $15,071 versus
of $230,876 in 2009, and overall $217,767.
compensation of $245,947. For the most part, district hospital
Statewide, the average non-prot hospital leadership manage facilities far smaller than
CEO in California – excluding district the typical acute care hospital in California.
hospitals – earned base compensation of According to the Ofce of Statewide Health
$514,237 and overall compensation of Planning and Development, the average
$732,004, according to salary data of more
than 110 CEOs accumulated and analyzed by
Continued on Next Page
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 Payers & Providers
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In Brief
Tri-City Expands
Tertiary Services
Tri-City Medical Center in
Oceanside has announced plans to
singnificantly expand its tertiary
care services in the cancer,
cardiovascular and orthopedic
specialties.
The hospital opened a
cardiovascular health Iinstitute late
last year, and plans to open an
ortopedic and spine Institute this
spring, followed by a cancer
institute at a later date.
The hospital has recruited two
specialty surgeons: John Regan,
M.D., an orthopedic specialist who
once headed the Cedars-Sinai
Institute for Spinal Disorders at
Cedars-Sinai Medical Center in Los
Angeles; and David Perkowski,
M.D., a cardiac surgeon and one of
the first practitioners of procedures
on beating hearts, known as an
“off-pump” procedure.
"Our vision is to be one of the
best hospitals in the nation by
2015,” said Tri-City Chief Executive
Officer Larry Anderson. “By adding
these pioneers in medicine to
our already outstanding medical
staff, we are making significant
progress to that end.”
Skilled Leases Five
Facilities
Foothill Ranch-based Skilled
Healthcare Group has reached
terms to lease out the five nursing
facilities it owns in Humboldt
County to Brius Healthcare LLC.
Under terms of the deal, a
subsidiary of Skilled will lease the
facilities to Brius for 10 years, with
an option to renew for two more
10- year terms. The subsidiary will
continue to own the properties.
Continued on Page 3
NEWS
Compensation (Continued from Page One)
hospital size in California in 2009 was 208
licensed beds. The average size of a district
hospital that submitted data to Chiang’s ofce
is just 114 beds, while nearly a third of
facilities reporting data have fewer than 50
licensed beds.
However, the average compensation per
bed among the district hospital CEOs is
$4,393, compared to $4,102 among the not-
for-prot hospital CEOs – suggesting a distinct
salary oor for executives willing to manage
these facilities.
“Many of our hospitals are in rural areas,
but many executives want upper-tier salaries
for those positions,” said Christine Chapman,
director of member services for the
Association of California Healthcare
Districts, a lobbying group for district
hospitals.
Meanwhile, there was a signicant gulf in
salaries between CEOs of district hospitals in
rural areas and larger facilities in urban or
suburban settings. In the latter instance, many
of them earned salaries matching CEOs in the
private sector.
The highest-paid district hospital CEO
whose data has been posted by Chiang’s
ofce is Nancy Farber, the longtime CEO of
Washington Township Hospital District. That
entity operates 359-bed Washington Hospital
Healthcare System in Fremont, a Bay Area
suburb. She earned $878,593 in base cash
compensation, and additional compensation
of $31,486. However, Farber’s per-bed
compensation for the 359-bed facility is
$2,521, far below the average for district and
private sector non-prot facilities.
District spokesman Christopher Brown
noted that the nancial success of the hospital
allowed it to spend some $75 million on
uncompensated care in 2009. Washington
posted a surplus of about $42 million that
CEO/COO/CFO COMPENSATION
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Page 2
same year, according to OSHPD data.
“You’d be hard pressed to nd another
hospital or, for that matter, a special district
hospital that has been as nancially successful
as we have,” Brown said. He added that the
failure of other districts to report their nancial
data put Farber’s compensation at the top of
the list.
Indeed, the district believed to employ the
highest-paid CEO, Palomar-Pomerado Health
System in San Diego County, did not yet have
its compensation data posted on its website
due to formatting issues, conrmed ofcials
with both the district and the controller’s
ofce.
According to a September 2010 report by
the San Diego Union-Tribune, Palomar-
Pomerado CEO Michael Covert earned $1.1
million in compensation for 2009, including a
base salary of $736,000 and a bonus of more
than $238,000. With 637 licensed beds on
two campuses, Palomar-Pomerado is the
largest hospital district in California.
Many district CEOs earned six-gure
salaries for overseeing districts that no longer
operate hospitals, their acute care facilities
having been closed down or leased to private
operators. Many of those districts function as
philanthropic organizations, using their
annual tax levies to fund healthcare programs
within the district or contributing them to the
operations of the hospitals managed by the
third parties.
Marin Healthcare District CEO Lee
Domanico was the highest-paid among that
group of CEOs, earning base compensation of
$581,836 and no additional pay.
However, Domanico’s situation was
unique: the former CEO of El Camino Hospital
and USC University Medical Center was hired
Continued on Next Page
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*For our ads, not your hospital
In Brief
"Our company is looking
forward to working together with
the medical community in
Humboldt County to deliver the
excellent patient care Brius is
known for," said Brius Chief
Executive Officer Shlomo Rechnitz.
"We're honored to have the
opportunity to make a difference."
The transfer, which is
expected to close next month,
appears to be a strategic retreat
from the region for Skilled, which
controls all but a handful of
nursing home beds in the rural
county.
Last July, a Humboldt County
jury ordered the firm to pay $671
million in damages stemming from
a class-action suit about how it
staffed 22 of its properties in
California. Skilled settled the suit
in September, and also agreed with
state and county prosecutors to an
injunction to maintain minimum
staffing levels at many of its
facilities in California.
Skilled had been accused of
failing to provide the state-
mandated minimum of 3.2 hours of
nursing per patient day, and falsely
advertising that it had.
Skilled officials said the move
won’t hurt the firm’s profitability,
but will reduce annual revenue this
year by about 2.5%.
CHA Comes Out
Against Nurse Ratio Bill
The California Hospital
Association has officially taken a
position against the passage of
Senate Bill 554.
Authored by Sen. Leland Yee,
D-San Francisco and sponsored by
the California Nurses Association,
the bill would treat non-
compliance with the state’s nurse
staffing ratios much as a patient-
endangering medical error. it
would allow the the California
Department of Public Health to
issue as much as a $10,000
administrative penalty for each
violation and correction failure.
NEWS
Compensation (Continued from Page Two)
by the district in early 2009 in order to
oversee the transition of 235-bed Marin
General Hospital in Greenbrae back into its
hands. The facility had been operated by
Sutter Health for years, but a bitter legal
dispute with the district over how surplus
funds were being disbursed led to Sutter
agreeing to end its long-term lease in
mid-2010.
“This is not a situation where you can just
add water and stir. Suddenly you have an
organization with just (a handful of)
employees running a signicant hospital,” said
district spokesman Jon Friedenberg. “He
secured nancing, built an executive team and
made everything that had to happen to
operate this hospital happen.”
Chiang, rst elected controller in 2006
and reelected by a wide margin last year, was
prompted by the recent salary scandals in the
City of Bell to rewrite his agency’s rules about
the submission of salary data from cities,
counties, special districts and other public
agencies. In the past, they were only required
to submit their payroll expenses as a lump
Kaiser Wins Top Diversity Award
Organization Tops DiversityInc’s List of Companies
Oakland-based Kaiser Permanente has been
named the top company on the DiversityInc’s
“Top 50 Companies For Diversity” list.
Kaiser has been on the list since 2006,
and was ranked fourth last year. It beat 535
other companies for the top spot.
Among its accomplishments: 25% of its
regional presidents are African-American;
25% are Asian-American and half are women.
"As an organization, we serve a very
diverse population, and from our board and
leadership to our frontline employees, we
HEALTHCARE’S BEST ADVERTISING VALUE
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Page 3
sum, said Chiang spokesman Garin
Casaleggio. Now, they are required to
submit them for each individual position
within an agency, which are then posted on
its website.
“This gives a much better snapshot of
compensation, and allows the public to
compare salaries and determine whether
they are getting value for the taxes they
pay,” Casaleggio said.
Less than 100 agencies of the more
than 3,000 required to report salary data are
now considered to be non-compliant with
reporting, according to Casaleggio. But they
contain some notable names among the
healthcare entities.
Among those that have not reported
data are Alameda County Medical Center, a
475-bed facility in the heart of Oakland;,
and Hemet Valley Health District, which
operates 415-bed Hemet Valley Medical
Center and 84-bed Menifee Valley Medical
Center. Ofcials with those districts did not
immediately respond to phone calls seeking
comment.
understand and value diversity,” said Kaiser
CEO George Halvorson.
Kaiser also made the DiversityInc.’s top 10
for recruitment of Latinos, African-Americans
and Asian-Americans. DiversityInc CEO Luke
Visconti said Kaiser understands effective
healthcare delivery is tied to having a diverse
staff.
In a statement, Kaiser said its efforts go
back to operating the rst racially integrated
hospital in the United States in the 1940s.
]
Payers & Providers
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OPINION Page 4
It’s Time To March Like An Egyptian
Uninsured Should Take to the Streets to Save Reform
Maybe the uninsured could learn something Humana, UnitedHealth Group and WellPoint.
from Egyptians and the uprising occuring Worse, while the Institute of
elsewhere in the Arab world. At a time Medicine characterizes the consequences of a
when the health reform granting most of the lack of access to care as “needless illness,
uninsured access to medical care is being suffering, and even death,” it is Republican
threatened, protests by the uninsured physicians in Congress who brazenly lead the
themselves are nowhere to effort to repeal care coverage.
be seen. By coincidence, there are
In 2009, a about the same number of
staggering 51 million elderly on Medicare as there
Americans had no health are uninsured. Egyptians
insurance. The Urban understand the power of an
Institute estimates that 400 aroused populace. Do the
of them die each week due uninsured?
to lack of access to care. In red states and blue
However, instead of states in 2012, there will be
pouring into the streets to congressional districts and
protest, the uninsured leave senatorial races up for grabs
the loudest push-back to and a contest for the
(well-insured) political presidency featuring a man
partisans. who made a historic effort on
One in six their behalf. Republicans have
Americans is now never put forth a serious
uninsured. Where are they? proposal to provide access to
Their faces and voices and By care for all. Will they suffer any
names are missed. At a hearing led consequences?
by Sen. Tom Coburn, an Oklahoma Michael If anyone understands the power of
Republican, a sobbing, middle-aged Millenson individuals coming together to make
woman confessed she couldn’t demands on their own behalf, it is a
afford care for her brain-injured husband. black man who started his career as a
Coburn, a physician, glibly responded that community organizer on Chicago’s South
“the idea that government is the solution to Side. Yet rather than rally the uninsured,
our problems…is very inaccurate.” The President Obama has allowed Republicans to
partisan Republican crowd applauded. frame the issue as a debate over the
An estimated 690,000 Oklahomans commerce clause of the Constitution.
have no health insurance. Why were so few The fight to retain actual funding for
in the room? Why did hundreds of them not the expanded coverage in the Affordable Care
jam into Coburn’s office the next day? Why Act is just beginning. It is a battle that
do they not continue to tell their stories? Democrats can win only if Americans
Like the ruling elite in Egypt or understand that the health and lives of their
Bahrain, who genuinely don’t comprehend friends, neighbors and relatives is at stake.
the problems of the average family, For that to happen, those whose lives are
Republicans are more likely than most intimately affected must first stand up
Democrats to believe that the uninsured for themselves.
really don’t have any trouble finding care.
The political and legal peril in which Michael Millenson is president of Health
health reform finds itself is attributable to Quality Advisors in Highland Park, Ill. He is a
the failure of the uninsured to visibly member of the Midwest edition of the Payers
advocate on their own behalf. Those & Providers editorial board.
without health insurance have allowed the
issue to become a referendum on Big Op-ed submissions of up to 600 words are
Government. And they have left the heavy welcomed. Please e-mail proposals to
work of lobbying against repeal to the big editor@payersandproviders.com,
insurance companies such as Aetna,
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Payers & Providers MARKETPLACE/EMPLOYMENT Page 5

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*New England Journal of Medicine, 2004.

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Payers & Providers MARKETPLACE/EMPLOYMENT Page 6

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